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Queensland Judgments
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Cathedral Place Community Body Corporate v The Proprietors Cathedral Village BUP 106957

Unreported Citation: [2020] QCA 239
EDITOR'S NOTE

This judgment considered whether a community body corporate under the Mixed Use Development Act 1993 could require certain of its members (representing commercial and retail areas) to subsidise the provision of amenities and services that only benefitted other members (representing residential areas). The Court of Appeal held that, while there was no express limitation, a community body corporate’s powers are constrained, in that it may not act in a way which prefers the interests of some members of the body corporate to the detriment of others.

McMurdo JA and Brown and Ryan JJ

3 November 2020

Background

This judgment relates to a collection of buildings called Cathedral Place in Fortitude Valley, Brisbane. [1]. Cathedral Place is the subject of a scheme under the Mixed Use Development Act 1993 (“the Act”). [2]. The applicant is the community body corporate for that scheme. There are six other body corporates which are members of the applicant, each of which is the body corporate for separate building unit plans within the scheme area. Five of those body corporates represent residential apartment areas; one of them, the respondent, represents the retail and commercial building area. [2].

The parties have been in dispute about the levying of contributions by the applicant from the respondent for amenities and services from which the respondent receives no benefit. [3]. For example, contributions have been levied for a restricted “recreation area”, and a gymnasium and sauna, which may only be used by occupiers of the residential lots. [34]–[35].

The applicant sued the respondent in the District Court in an attempt to recover unpaid levies; the respondent counter-claimed for amounts it contended had been overpaid. [4]. The primary judge essentially agreed with the respondents’ key contention that the applicant could not require the respondent to subsidise the provision of services or amenities from which it could not benefit (“the subsidisation question”), and granted relief accordingly. [5]. The applicant sought leave to appeal against those orders. [10].

The key issue in this judgment was whether the primary judge erred in relation to the subsidisation question. The Court of Appeal concluded that there was no error in the primary judge’s ultimate conclusion. Reasons were given by McMurdo JA, with whom Brown and Ryan JJ agreed. [85]–[86]. Another judgment also summarised in this edition of the QLR ([2020] QCA 240) considers another legal issue arising out of the same factual circumstances.

The primary judge’s reasoning / applicant’s contentions

Section 176 of the Act confers certain powers on a community body corporate, which relevantly includes a power to enter certain agreements for the provision of amenities and services. [20]. However, the primary judge found that this power was restricted, relying in particular on the High Court’s judgment in Humphries v Proprietors Surfers Palms North Group Titles Plan 1955 (1994) 179 CLR 597. [40]. In Dynevor Pty Ltd v Proprietors, Centrepoint Building Units Plan No 4327 [1995] QCA 166, the Court of Appeal said that the effect of Humphries was that “the powers of a body corporate” constituted under analogous legislation “are circumscribed by the specific statutory provisions of the Act”. Further, it was said that it would be “an improper exercise of the powers of the body corporate to apply corporate funds for the benefit or purposes not of the body corporate but of a particular proprietor or proprietors”. [32].

The primary judge particularly considered that the statutory intention was that “where community property is made available to a particular person or persons, it is to be at the cost of that person or persons”. [41]. Notably, there are provisions in the Act dealing with benefits conferred specifically on one or some proprietors, and these provisions provided that the costs must be recovered from the members of the community body corporate who requested the works. [41]. Further, given that the idea of amenities or services being provided only to some, but at the expense of all, was “fundamentally … unfair and unjust”, if that was the legislative intention it would be expected to “appear with reasonable clarity from the terms of the legislation”. [41].

In seeking leave to appeal, the applicant contended that the primary judge had impermissibly read down the powers of a community body corporate, giving a modified meaning to the statute which was inconsistent with the language actually used. [50].

The Court of Appeal’s reasons

McMurdo JA noted that there is no express limit in s 176 of the Act that prevents subsidisation, but “that does not mean the power is unconfined”. [65]. His Honour said that this power, and other powers of a community body corporate, “must not be exercised in a way which prefers the interests of some members of the body corporate … to the detriment of others”. [65]. Such a limitation was confirmed by provisions about the levying of contributions (indicating, as the primary judge said, that costs were to be recovered from those who requested certain works). [65]. Relying on Humphries, his Honour pronounced that (at [65]):

“The community body corporate must be impartial between its members in the performance of its functions and the exercise of its powers. Necessarily, there will be some services which, for reasons of practicality and economy, will have to be provided across the entire site and conceivably, to the benefit of some more than others. However, it is another thing to say that services which are provided only to some should be paid for by others.”

Accordingly, while leave to appeal was granted, the appeal was unsuccessful in relation to the subsidisation question. [74]. However, for reasons it is not necessary to explore here, the appeal was successful in part, in that the Court of Appeal set aside one of the declarations made by the trial judge, and altered the terms of one of the injunctions that had been issued. [76], [80].

W Isdale

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